Tim Loughton: One of the least attractive aspects of SEN is the fact that parents have to battle for appropriate statements to secure better educational outcomes for their children, which often ends up with stressful, costly and adversarial tribunals. Witnesses who have given evidence to the Committee considering the Children, Schools and Families Bill have pointed to a missed opportunity that Brian Lamb's report could have addressed. Will the Government now offer parents a decent mediation system, rather than complex tribunals, so that all families stand a decent chance at appeal for their children?

Bob Russell: I am grateful for that response. For those who doubt whether one person can run more than school-that used to be my view-may I invite them to come to my constituency and see the inspirational leadership of one head teacher, Mr. Jonathan Tippett, who has turned around three schools? He continues to turn them around, but regrettably-I invite the Minister to come to see this for himself-two of those schools have been badly let down by the Tory-run Essex county council, which plans to close Thomas Lord Audley and Alderman Blaxill schools.

Andy Reed: My hon. Friend will know that, in Leicestershire, the county council proposes to close two out of three secondary schools. Does he agree that closing an outstanding secondary school would be a big mistake, and that, in trying to ensure that it is possible to deliver in a town the size of Loughborough, greater collaboration-not necessarily the removal of heads- and the sharing of best practice by schools is the best way to deliver education for 11 to 14-year-olds?

Edward Balls: Absolutely. Faith schools were in existence providing free education to often the most deprived children before the state started to do the same. I fully support faith schools. They have to abide by the law on fair admissions. I think that agreeing to calls for the admissions code to be dropped to allow faith schools to pick by interviewing parents would be the wrong thing to do. I also think it is right that faith schools promote community cohesion. Both the Church of England and the Catholic Education Service are supporting our changes to the rules on sex and relationship education. I have very strong and good relationships with the faith organisations, which are supporting the direction that we taking and are not supporting the proposal by the hon. Member for Surrey Heath (Michael Gove) to keep the opt-out age at 19.

Andy Reed: I am sure that Ministers will admit that we made a slow start in trying to tackle the disaster that was school sport in the 1990s. We did not make significant progress until 2002-04. Despite the fact that we are now nearly up to 90 per cent. participation, what extra measures can my hon. Friend take to ensure that those who are still not getting at least two hours get them, and that, where there is a drop-off with the school club link, particularly for girls, action is taken so that everybody gets the chance to take part in sport?

Mark Hoban: Consumer credit is a feature of everyday life. Our society has become increasingly dependent on credit, as we saw in the run-up to the recent financial crisis. The hon. Member for Wolverhampton, South-West (Rob Marris) talked about the credit position in France and Germany, but it is worth pointing out that the UK had higher consumer debt than France and Germany combined. We have seen a cultural change, too. No longer do consumers have to save for new purchases; they can take out a credit card, a store card or a personal loan, or they can withdraw equity from their house. For many people, rising levels of debt were seen as manageable, so long as the economy motored along with low unemployment and rising levels of income. That optimistic outlook, however, was predicated on an end to boom and boost and we can see the cost of that assumption today.
	The change to the cultural norm on debt was driven partly by a society that takes on much more debt through home ownership, going to university and so on and partly by the marketing of credit. The Bill tackles that, in part, through banning unsolicited credit card cheques. Those cheques were an indefensible practice that even people in the industry found rather hard to defend.
	My new clause 14 considers another aspect of the marketing and availability of credit-that is, store cards. It seeks to address two issues: the rates at which store card debt can be charged and the sales practice surrounding them. We need to distinguish between a store card and a credit card. Store cards are offered for exclusive use in the shops of a particular retailer, whereas a credit card can be used at a wider range of outlets. Of course, some retailers, such as John Lewis and Marks & Spencer, have a credit card rather than just a store card. If one shops at a major department store, one is likely to be offered the chance to take out such a card at the checkout, often in combination with an attractive offer, such as a 10 per cent. discount on that day's purchases.
	It sounds quite attractive, until one looks at the rates charged by store cards. A survey last year by  Which? highlighted the high cost of some of the store cards that are available. Argos charged an annual percentage rate of 27.9 per cent., and New Look charged 28.9 per cent., whereas cards issued by retailers such as Ikea, River Island and Topman all cost about 19.9 per cent. According to  Which?, the average APR of store cards is about 25.2 per cent., compared to an average for credit cards of about 16.8 per cent. That shows that store cards tend to be relatively more expensive, compared to reasonable alternatives. Even cards at the bottom end of the scale, such as those issued by Ikea and River Island, still charge a higher APR than the average for credit cards.
	High rates in conjunction with low minimum payments mean that it can take some time to pay off relatively small amounts charged to a card. For instance, it would take six years to pay off a balance of £100 on an Argos store card, for which the minimum monthly repayment is either £2 or 4 per cent. At the other end of the scale, it would take two years and 10 months to pay off the same balance on the River Island store card, which has a lower interest rate and a higher minimum repayment. It appears, therefore, that high rates of interest make store cards a poor way to borrow, yet there are more than 14.6 million of them in circulation.
	In 2006, the Competition Commission, recognising the high cost of credit, announced that any providers offering a card with a rate above 25 per cent. should issue a wealth warning telling customers that there are cheaper ways to borrow. Despite that, however, store cards remain in wide circulation.
	We might assume that, on seeing the wealth warning, a rational consumer might decide to shop around for another form of credit before taking out a store card-that such a person would leave his or her goods in the shop and pop down to the bank, or go home and search online for a form of cheaper credit. However, the evidence suggests that things do not always happen that way, as the rational consumer will see the opportunity to reduce the cost of shopping offered by the day-one discount. He or she will take advantage of that discount and then repay the balance straight away, thus avoiding the interest cost.
	Of course, if consumers were always that rational, there would be no store card business, because people would simply take advantage of the discount, pay off the balance and walk away. However, despite people's best intentions, the reality is that the desire for short-term gratification overcomes the rational response. If it did not, retailers would not offer these deals.
	My new clause 14 therefore contains two provisions. First, it would give the Office of Fair Trading the power to cap excessive interest rates, where they are not in the interests of the consumer or the debtor. In a way, that mirrors some of the suggestions made by the hon. Member for Wolverhampton, South-West, and I shall return to some of the differences when I address his proposals directly. The new clause would place no obligation on the OFT to use those powers, but it would provide some tools for going beyond the wealth warning approach announced in 2006.
	The second element of new clause 14 is the provision that would enable the decision to take out a store card to be decoupled from any requirement to buy from that shop on that day. It would mean that people taking out a store card would have a seven-day cooling off period in which they could not use it. That would enable consumers to shop around for a better rate, and it would also tackle one of the sales practices that incentivises the take-up of cards.
	It is worth thinking about what happens when a store card is taken out in a shop. There was an article on store cards in  Which? Money magazine last month, for which a researcher went to open a number of store card accounts. In the course of a couple of days, he managed to rack up nearly £3,000 worth of credit, even though his income for that year was about £1,000. The article says that half the companies that he approached rejected his application, so I suppose that we should take some reassurance from that.
	Actually what happened is quite instructive. The article states that
	"none of the stores we visited verbally warned James about the high interest rates and the low minimum payments on the card and none of them told him that they were unsuitable for borrowing. This could only be found in the smallprint of the terms and conditions given to James...waiting in a queue in a busy shop is not the ideal place in which to read the small print on an application."
	My new clause would give the purchaser, or the person taking out a retail credit-token agreement-as it is described in the new clause-the opportunity to go home and think carefully about whether they want to use the card. It would not close off the provision of credit to those customers, but would give the person taking out the card the opportunity to think carefully about whether they want to pursue that route.
	One might ask why I have focused on store cards and not on the personal loans offered by some retailers at the point of sale. That is a valid question and it is worth exploring. There is a difference between a loan and a store card, which is a form of revolving credit, whereby a person enters an arrangement with a retailer that enables them to spend up to a certain amount. There is no fixed repayment schedule and there can be relatively low minimum repayments. In the  Which? sample, repayments ranged from 2.5 per cent. or £5 for British Home Stores to 4 per cent. or £4 for companies such as Topman or River Island.
	It is possible to take on additional commitments without deliberate thought. Many store cards adopt the low and grow approach to credit-a subject we touched on in our debates in Committee, and which was initiated by the hon. Member for South-East Cornwall (Mr. Breed). People start with a relatively low credit limit and it is then increased.
	A personal loan is different. There is a fixed repayment period for a fixed amount, so when a person takes out a loan they make a commitment. They know the repayment level and they know how long the loan will last. It is a well determined, well defined commitment, unlike a store card, for which the agreement is open-ended and there is no fixed repayment period and no fixed amount of borrowing because the credit limit can be increased. The argument that applies to store cards is very different from that which applies to the loans offered by our major retailers. That is why new clause 14 is linked to store cards. The measures set out in my new clause are proportionate and reasonable. They reflect our party's policy, and it has been our party's policy since well before the economic crisis.
	I am not entirely sure what the new clauses tabled by the hon. Member for Wolverhampton, South-West represent. The hon. Gentleman is, I think, a Parliamentary Private Secretary; he is part of the payroll vote and he is here to support the Government in debates. He should be a loyal supporter, yet it appears to me that his new clauses question settled Government policy, unless they are a teaser-opening the way for the Minister to accept new clauses 1 to 7. Is this a sign of independence of mind finally breaking out? In Committee, when my hon. Friend the Member for Chichester (Mr. Tyrie) tabled a new clause about competition, the Minister thought the proposal should be part of the regulatory objectives of the FSA, but recognised that Government policy was rather different. Perhaps he opened the floodgates for the hon. Member for Wolverhampton, South-West to table all sorts of amendments.

Rob Marris: I have been independent-minded on certain things for a long time and I quite frequently question Government policy-sometimes successfully. Even though I say it myself, I think that a measure of my independent-mindedness, which seems to surprise the hon. Gentleman, is the fact that I was voted Back Bencher of the year in 2008, and someone does not get voted Back Bencher of the year by Members of all parties if they are a complete lickspittle.

David Drew: But surely my hon. Friend the Member for Wolverhampton, South-West was saying that there is no competition. It is not that people are queuing up; they are offered loans on the doorstep by others from their community who, supposedly, are genuinely lending money, but there is no educative process and no ability to rationalise this and go out to other lenders. The lenders are preying on the most vulnerable. Is it not about time that we in this place tried to do something about it? We have had debates on whether there should be maximum repayment terms, but apparently we got nowhere with that. My hon. Friend is simply trying to put create some structure in an operation that is letting people down. What is wrong with that?

Mark Hoban: The problem is what would the consequences of that structure would be. I do not doubt that the new clauses have been tabled with the best of intentions, reflecting some of the concerns that have been raised, but we need to think carefully about the unforeseen consequences. For example, there may be a switch from high rates to low rates with additional charges. I am not sure that the demand for credit would necessarily be extinguished as a consequence of the proposals. We may not think it is right, but people would still need credit to deal with unexpected variations in income or expenditure, and where would they go if that money was not available from Provident? I will return to that point.
	The Policis report suggests that rate caps ended up in a rather odd situation whereby lenders felt it was uneconomic to advance relatively small loans, so either no money was lent to customers or they would be lent a higher amount than was strictly necessary. In Committee, we talked briefly about ending unsolicited increases in credit limits. We need to think about what amounts people would lend. The hon. Member for Wolverhampton, South-West questioned the merits of this argument, but in France and Germany rate caps meant that more people used illegal lenders. That is the evidence from the Policis study.
	The hon. Gentleman also implied that the only opponents of rate caps were home credit companies, but let us not forget that in 2005 a coalition including Citizens Advice, AdviceUK, the National Consumer Council,  Which? and ABCUL-the Association of British Credit Unions Ltd-all urged the House of Lords to oppose a rate cap. There is a coalition here: it is not just people in the home credit market but a wide range of people with a close interest in this area who are concerned about the impact of a rate cap.
	I shall not repeat in full the words of Elaine Kempson-the hon. Member for Wolverhampton, South-West cited them at length-but let us turn to the alternative and what would happen if the rate cap were applied. Elaine Kempson said:
	"Finally, there is a danger that lenders would move out of this market altogether, leaving poor people even more prey to unlicensed lenders."
	The hon. Gentleman suggested that credit unions might fill that gap. I am a great supporter of credit unions, which do an excellent job, and I agree that it would be good to see them grow so that they supplied a share of the market comparable with what they are able to supply elsewhere. However, even credit unions have to turn people down. Many people are concerned about the fact that credit unions want a cap on the rates that they charge. Credit unions will not supply the whole demand, and others will move in to that space, which I am concerned will be filled by illegal money lenders and loan sharks. As I said in my intervention on the hon. Member for Wolverhampton, South-West, there has been a great deal of discussion about whether there is a sustainable model for not-for-profit home credit. The Joseph Rowntree Foundation suggested that the APR would probably be 123 per cent., so it is an expensive operation.

Rob Marris: I thank hon. Members for some thoughtful speeches this afternoon. I am quite happy to take some ribbing from the hon. Member for Fareham (Mr. Hoban) on this topic, because, of course, the Labour party is not as monolithic as he might think. I have been propounding such measures for the two and half years that I have been a parliamentary private secretary. I have never, ever been criticised by a Whip or Minister, and I have won some battles with the Government. He may get a shock, because the prospective Conservative parliamentary candidate for Wolverhampton North-East wants to introduce restrictions-I note that that came about after I tabled the new clause-so both parties are divided on the matter.
	The concerns expressed today have been on the workability of any cap. There is an understandable fear that were caps to be introduced, fringe borrowers who currently use legitimate fringe lenders would turn to loan sharks. However, we must be clear that we are talking about a social ill and that some people simply should not be borrowing money. We should bear that in mind. That is what the Crowther committee was referring to in 1971.
	It is paradoxical that all three Front Benchers made thoughtful speeches against the new clauses and on the unworkability of caps and so on, but that we already have caps on things such as utilities. We also have a cap on mobile phone roaming rates, for example, which perforce, and by definition, is for some of the more privileged members of our society, namely those who are wealthy and prosperous enough to go abroad on holiday with a mobile phone and make telephone calls. The idea of caps exists in our society, legislation and economy.
	However, I take heart from what my hon. Friend the Economic Secretary said about the OFT bringing out guidance later this year on adequate information for borrowers-that key point was raised by my hon. Friend the Member for Stroud (Mr. Drew) in an intervention. I note that the high-cost credit review, which I believe is due to report in spring, will be looked at carefully by the Government. I hope they reconsider caps on the kind of lending arrangements to which new clauses 1 to 7 refer if the evidence indicates that there are significant problems because of the lack of competition in such markets, which I believe there are, and that the fears that caps will lead people to turn to loan sharks are overblown, as I believe they are. On that basis, with those reassurances from the Government, I beg to ask leave to withdraw the motion.
	 Clause, by leave, withdrawn.

Frank Field: I am glad that my hon. Friend-I shall call him that-mentioned that point. He has managed to put that on the record without my needing to do so, because-as we all know-Robert Maxwell is not now present to answer those charges. At least, we do not think that he is present.
	The House took those matters seriously and two things happened. The then Government asked Sir John Cuckney-later Lord Cuckney-to trace the funds that had been lent out and recover them. Sir John went about the task with the diligence one would expect from someone with his rich career. He was so open-minded on the issue that he adopted the American practice of calling in a judge to mediate with those who claimed that they had taken shares in good faith and should not have to pay back any money. After about five months, Sir John's patience ran out and he called the main recipients of the shares to his office. He said that he would provide lunch, and he effectively locked them up for the day so that they would come up with the funds that the pension funds said that they needed to recover their lost assets. Anyone who knows anything about Sir John's career will know that he knew where the bodies were buried and, by the end of the day, hundreds of millions of pounds were produced.
	The second measure taken-apart from the approval of Sir John Cuckney's work-was a major pension fund review. The Select Committee was involved-indeed, one of the Clerks at the Table was the Clerk to the inquiry. We proposed many reforms, and the Government accepted many of them. One of them was to establish the position of custodian, so we could not again have a situation in which a forceful character such as Robert Maxwell could bully the chairmen and trustees of company pension schemes to hand over the assets of the pension funds. So the custodian-we thought-would play a key role in ensuring the safety of pension funds.
	Once I learned that the horrors of short selling were way beyond what I had imagined them to be, I approached the pensions regulator. Quite a lot of our time in this place is naturally spent picking fights with public and private officials whom we do not think adequately fulfil their role and, sometimes, nowhere near earn the salaries that they are paid. I want to put it on record that I found dealing with the pensions regulator to be a most reassuring task-indeed, so much so that, having conducted a review, the pensions regulator has laid guidance to trustees saying that they now have a duty to ensure that they know about it, if their funds are being lent. That suggests that the single case that I took to the pensions regulator was not a one-off job, but that what had happened was more common than we had dared to imagine.
	Worse still, the custodian was a bank. Although the chairman saw after probing that other assets were being given back to the pension fund for the shares and gilts that the custodian bank was borrowing, without the knowledge of the chairman, trustees or members of the fund, the collateral in no way matched the value of what was being taken. For example, taking Government gilts, which, despite all our problems with public debt, are still one of the most pukka gilts in the world, and substituting gilts of equal value from fourth-world countries is not, in my view, an adequate recompense for what was being undertaken. The same goes for the shares that were borrowed in order to be used in short selling. Although those substitute shares were of the same nominal value, nobody in their right mind would think that the risks attached to them were the same as those attached to the shares that had been lent.
	I therefore conclude that the Government's success in rescuing the banks was much greater than that to which we have paid tribute in this House, in that if the banks had gone under, which was a genuine worry, and the practice that I am describing had been more widespread than a single pension fund-that is, if there had been many more pension funds whose assets had been lent out by a custodian that happened to be a bank-not only would the chaos of not having an acceptable medium of exchange have followed, but the whole house would have come tumbling down.
	I also wrote to the Financial Services Authority, which was not quite as anxious to deal with the issue as the pensions regulator. I asked the FSA whether, in doing spot checks, it looked at banks' balance sheets and at the array of gilts and other assets that it wishes banks to have so that they behave prudently and, should anything untoward happen, so that they have some genuine assets that they can draw on for their depositors, but to my mind a satisfactory conclusion was not reached. The worst scenario, therefore, was where a pension fund was having its shares lent without its knowledge by the custodian-part of one of our major high street banks-and where it was open to the other banks to borrow those assets and perhaps put them on their balance sheets in order to convince the FSA that they were in a healthier condition than they perhaps were. That was the worst scenario, unless one considers that practice to be acceptable; I think that it is not.
	I have asked my colleagues for their views on new clause 8, and they feel that it is too restrictive. When I first started out, I thought that short selling itself was wrong and that we should ban it. Perhaps there is a bit of that flavour in new clause 8. I am very interested in the House's view, albeit not on the details of how one might police short selling. I am obviously interested to hear people's views on how we can make that method safer. For example, it might be perfectly proper to short sell, if the share price is rising rather than falling. Those are the kinds of locking mechanisms that I hope we can establish.
	I want the House specifically to address the question whether we need to consider further-perhaps not here today, but in another place-how we can better protect our constituents' assets that are wound up in company pension schemes. I have given the House one example. If that were the only example, it would still be worrying, because it relates to a medium-sized fund. However, my guess is that it does not stand alone, and that other funds have had their shares and assets lent without their permission, risking the life savings of the company concerned and the members of that company's pension scheme.
	I wonder whether we need to consider putting a lock on what custodians can do in that regard. The House will see that, among the many measures in the new clause, one of the safeguards is that no pension fund assets can be borrowed unless the chairman and trustees know about it and unless they have consulted the membership-that is, us-if need be. I tried to table some questions to find out what was happening to the House of Commons MPs' pension fund, but, for some reason, I did not get very far towards getting an answer-I did not get an answer saying that the funds were not being lent, so perhaps that practice extends to our pension funds, just as it does to those of constituents.
	I ask these questions in the spirit of inquiring into what the House thinks. Perhaps we can regroup with a much more targeted amendment in the other place, but I urge hon. Members to support the new clause.

Andrew Tyrie: There might be a suitable peg somewhere in the Bill for such a measure-I have not looked carefully enough to find one-but the new clause uses a machine gun to try to hit one very specific target. It is inappropriate and would cause a lot of collateral damage, as machine guns tend to do when trying to hit only one target.
	I shall take a brief look at the new clause-after all, that is what we are discussing. It begins by proposing to prohibit the short selling of shares. Why stop at shares? If one is trying to address the issue of pension fund assets, what about the bond market, what about corporate bonds and what about that range of financial instruments that runs all the way from poor-grade equity to top-tier sovereign risk? Once one has decided that short selling is a "Bad Thing", there is no logic to limiting this provision to shares.
	When I looked at the new clause a bit more carefully, I noticed that proposed new subsection (1)(a) bans short selling except under certain conditions-for example, in a rising market. That is a curious one-way ticket, and such an approach can only be distortive in any market-if one bans something in one direction and not in another, one will do a lot of damage to the process of trying to find a true price.
	Proposed new subsection (1)(b) is even more bizarre, because it says that the only circumstances in which short selling are permitted are where
	"the beneficial owners of the shares had given prior permission at an annual general meeting for the shares to be lent."
	That is such a restrictive condition that it would suck all liquidity out of the forward markets, which would be the end of forward markets. Forward markets have been around a good while. There was an effective forward market in rice in ancient Japan, and it is said that there was one in China, so they have been with us for as long as there have been markets.
	When examining the clause, one must ask a more basic question: do we want derivatives markets or not? If we decide that we need them, it is logical to try to maximise their liquidity, as that will lead to higher levels of capital formation and more efficient risk allocation, to the benefit of us all. Short selling strengthens the long market; it provides strategic investors with an opportunity to hedge their positions and gives them confidence to take those long positions. An investor will be much more reluctant to buy if the would-be short sellers' views are not expressed in the market and are distorted by restrictions.
	The key question is always that of investor confidence. I took a look at a number of things on the web about what various people have had to say on this matter recently. Troy Paredes, a commissioner on the Securities and Exchange Commission, recently gave an interesting lecture to the Harvard law school forum on corporate governance in which he came to a pretty clear view. In line with what I have just implied, he said:
	"Short selling...is tied to investor confidence. Investor confidence depends on investors' faith in the integrity of markets. Investors expect that securities prices are meaningful in that they reflect the market's overall assessment of what a company is 'worth' by aggregating into a single number the different views of market participants...in promoting market efficiency, short selling can foster investor confidence, as investors can be confident that securities prices reflect both optimistic and contrarian views."
	I could not have put it better-in fact, I could not have put it remotely as well. That is a clear expression of the need to retain short selling.
	The risks usually attributed to short selling-the right hon. Member for Birkenhead followed that approach-generally turn out to be something else. They turn out either to be the risk of share price manipulation, which he did not discuss very much, or to be fraud, which he discussed quite a bit, which is why I intervened on him to clarify what was going on in the Maxwell custodial case. Those are, quite rightly, already offences under existing law, and if the law needs tightening in that field-the right hon. Gentleman has suggested that it does-we should pay particular regard to that. We should look carefully to see what further steps should be taken to make share price manipulation and fraud more difficult.
	As this clause is about short selling, we are concentrating on practices that take place with respect to shorting the market. The long share market, however, is just as vulnerable to fraud and manipulation. One such practice, which good quality regulation seems substantially to have reduced, at least, was known as "ramping the stock"-talking it up while taking a holding and then selling up, leaving the poor souls who had taken the advice to take the fall in the market afterwards.

Mark Hoban: My hon. Friend is absolutely right. The argument made by the right hon. Gentleman seemed to be more about how we improve the governance of pension funds than about the merits or otherwise of short selling. The fact that the trustees did not know what was happening suggests that more due diligence should have been carried out in respect of the nature of their agreement with their investment manager and the custodian.

John Howell: This is the first debate initiated by the right hon. Member for Birkenhead (Mr. Field) in which I have participated. It has been an interesting discussion about what, I am sure, many people outside the Chamber regard as a rather esoteric but nevertheless important subject. If there are concerns about the role of the custodian, I am confused as to why the right hon. Gentleman did not table a new clause specifically to deal with that, because we might want to discuss a number of problems related to that and how that role fared throughout the recession.
	The proposals would make a fundamental change to the measures set out in the Bill, as they would move from a situation in which short selling is allowed unless it is banned to one in which it is banned unless it is allowed. When my hon. Friend the Member for Chichester (Mr. Tyrie) and I were in central and eastern Europe, introducing market economy and democracy to those areas back in the '90s, the distinction between a society in which something was allowed unless banned and one in which something was banned unless allowed was the principal distinction that underpinned the difference between the free markets of the west and the markets that we were trying to eradicate under the old communist system. When we used the word "eradicate", we meant "eradicate", not "reduce it to 10 per cent."
	When the Committee discussed the issue, there was a question about the basis on which we were working. There was considerable consensus that regulatory intervention was justified where there were identified market failures, and it was expected to deliver net benefits to the market. That was certainly the presumption in our significant debate about what those market failures might be. The obvious example of abuse was largely covered by the FSA's existing powers, but there was also the question of the disorderly markets that we have seen in the current crisis, as well as deficiencies in transparency.
	I recommend that the right hon. Gentleman read the discussion paper produced by the FSA on short selling, because it covers all those issues in considerable detail and concludes:
	"Short selling can generally be expected to increase market efficiency but can have negative impacts. In times of extreme market turbulence and for firms engaged in rights issues these risks are heightened. The fact that short positions are not normally disclosed to the market may also result in market transparency failure. Nevertheless, given that short selling has clear benefits, restrictions on it do appear to come at a cost".
	That cost refers not just to liquidity and the cash cost but to reduced market efficiency.
	The extent to which there were problems was not clear, even to the FSA. On transparency, for example, it concluded:
	"It is not clear whether a lack of transparency about the level of short selling and the identity of short sellers gives rise to a material market failure."
	Even after doing all that work, there was still a considerable amount of disagreement.
	My hon. Friend the Member for Fareham (Mr. Hoban) touched on some of the options that the FSA identified. There are six in all. One of them, which follows the right hon. Gentleman's line, was to prohibit the short selling of all stocks. Other options were to prohibit naked short selling, prohibit short selling of financial sector stocks, prohibit short selling of companies engaged in rights issues, prohibit short selling by underwriters of rights issues, and finally, prohibit short selling where there is urgent need. It is the last one that we have ended up with in the Bill, although it is the first one towards which the right hon. Gentleman's new clause is edging.
	As stated, there were a number of costs in terms of pricing efficiency, liquidity and forgone profits. One of the issues that needs to be explored further-I have no idea whether the right hon. Gentleman has thought through the implications-is the costs of the scheme. It concerned me in Committee that with the Government's preferred option, they were rather clutching at straws, given the wide ranges put forward in the impact assessment, which went from £106 million to £1,066 million, as the cost of the option that they eventually chose, which is now in the Bill. It would be interesting to see whether there was a quantification, how much wider that might be and what the top end of it might be, if one followed the right hon. Gentleman's view.
	The other issue which it is important to mention is the relationship with the international regime, which has not been touched on so far. There is an admission already by the Treasury that the UK currently has a wider definition of market abuse than many of our European counterparts. Even the FSA admits that market participants have encountered problems and significant costs in having to comply with the variety of different regimes introduced across a number of different jurisdictions. It should be recognised that we need to be seen to have a regime that is applied as widely as possible internationally. We struggled with the clause currently in the Bill, and how that fitted in with the international regime. One of the witnesses who spoke to us concluded- damning with faint praise-that it would probably work out all right because the wording is sufficiently wide that in all probability it will allow anything into it, which is hardly a glowing endorsement.
	I find it difficult to see how the new clause would fit in with the approach adopted by other countries. Germany has a ban on naked short selling, but only on specific financial institutions, not generally. In its approach, France has aimed at the short selling of financial sector securities as well. Finland has opted for considering more supervision, rather than any banning. The Czech Republic, being the Czech Republic, has opted for no action whatever on the matter.
	The only country that I could find, although there may be others, where there was any semblance of a relationship to what the right hon. Gentleman was hinting at was Belgium, where the whole approach to short selling was linked to good order, integrity and transparency. The rules there were to ensure that sales were covered, but with restrictions on the lending of shares. It is not a regime that has widespread attraction or merit. If we adopted the right hon. Gentleman's new clause, therefore, we would end up down an alley of regulation where none of our European competitors would want to go. That would leave the UK exposed.

Frank Field: I have learned much from this debate, not least from the disclosure by the hon. Member for Henley (John Howell): I had no idea that he and the hon. Member for Chichester (Mr. Tyrie) were outriders for the free market in eastern Europe. Although that free market may have been beneficial overall, there have in those societies been many permanent losers from the new gospel that they have taken to those countries.
	What disturbs me most about the debate is that I have failed to register in all parts of the House that there was-anyway, but even more so after the banking and economic crisis in this country-disquiet about the fact that people can use shares that are not theirs to force down the price of those stocks and perhaps endanger a company's future; that they can undertake similar activities with the basic things that we need for our everyday lives, such as oil and food; and that somehow those activities will continue. However, my hon. Friend the Minister is right: my proposed change is a probing new clause, and we will have a chance to consider what has been said today before the measure appears in another place.
	Before I withdraw the new clause, may I state on the record that, until the debate opened, I did not know that my hon. Friend was not standing at the next election? I am sure that it is good news for him-otherwise he would not have made the decision-but it is bad news for the House.
	I beg to ask leave to withdraw the clause.
	 Clause, by leave, withdrawn.

Frank Field: I shall try my luck with this new clause. Let me set out the stall behind the proposed change, which is not a probing clause but one for which I hope to have sufficient support that, if the Government do not accept it, we can vote on it.
	The current mantra, which one hears too much of, from Presidents, commentators and the media generally, is that we must move to a situation in which no bank is too big to be allowed to fail. I cannot understand that conversation. If we look at this country's experience, we find that Northern Rock was an honourable bank playing a very important role in its own region, but nobody in their right mind would think that it was of a size that would fit the formula that we hear in the cant being peddled about banking reform. It was a very small player, but the Government rightly thought that, small as it was, it was still too big to be allowed to fail because of the domino effect it would have had on other banks in our financial system and on our economy generally.
	So although I do not share the commentators' views about where we have got banks, I share the banks' view of where they think they have got us. The banks know that they have got us over a barrel, but we have come up with nothing to control their activities. We know that when the time is ripe-certainly, when the banks judge it to be ripe-they will try to re-establish an equilibrium that is even more favourable to them than the current one. I fear that in that world, particularly given the Supreme Court's action recently, one move will be to disengage from offering free banking to people who bank with a bank or a building society and have their accounts in surplus. I therefore appeal to the House not to trust the banks' better judgment, or what they see as being in their own self-interest, but to protect, most importantly, our poorer constituents. Every bank and building society that trades in this area should provide one account for banking purposes and one for savings purposes on which there should be no charges provided they are in surplus. That is my case. I cast the bread on the water and shall see where it gets me.

Andrew Love: I wish to speak to new clause 15, and I make no apology for bringing it forward today. It covers important policy issues, and there is significant public concern about the Supreme Court's recent decision.
	This new clause was fully ventilated in Committee and ably moved by the hon. Member for South-East Cornwall (Mr. Breed), so I shall not go over the issue, which is well known, other than to reaffirm that thousands of consumers have been affected by the decision on unauthorised overdraft charges, and to emphasise the mix of public surprise, shock and delayed anger at the Court's decision, which was to reverse the previous decision of the Court of Appeal and lower courts. That is why there is considerable public concern.
	I want to focus on the judgment that two members of the Supreme Court made, allied to the main finding in relation to overdraft charges. One of the judges was quoted as saying:
	"Parliament may wish to confer a higher degree of consumer protection by re-visiting its previous decisions"
	when drawing up legislation. New clause 15 is an attempt to achieve exactly that. It would respond to genuine concerns among the public and ensure fairness as we move forward after the great disappointment of the Supreme Court decision on existing charges. Many consumers and consumer organisations think that the best and simplest way to do this is to revisit the Unfair Terms in Consumer Contract Regulations 1999. The new clause reflects that, because it would ensure that these charges were clear and transparent, which is an important consideration given the history of the development of this issue. It is also proportionate, which is a critical consideration in all this.
	Some people will ask why the Department responsible-the Department for Business, Innovation and Skills-cannot simply issue amended regulations. However, as we heard in Committee, that is complicated by the consultation on a new European Union consumer rights directive, which has been going on for a considerable period, as is usual in such cases. The Minister said that slow progress was being made. However, given that, as was agreed across the Committee, there is little prospect of this mechanism coming into force very soon, that does not answer any of the public, or indeed parliamentary, concerns about the matter. The new clause is a sensible and pragmatic response to what happened at the Supreme Court.
	In Committee, the Minister said that he is unsympathetic, at this stage, to following a legislative route and prefers a voluntary approach on the basis that that would be quicker and, perhaps even more important, more flexible in how it addressed not only the particular issue dealt with by the Supreme Court but other changes that may occur in the marketplace. Although I could have some sympathy with that argument, the history of this issue makes it difficult to believe that there is an easy or a quick solution.
	The Minister says, rightly, that if voluntary measures fail to deliver, then Government action will follow. However, I question exactly what will happen in such circumstances. Throughout our discussions of this matter, as it has gone through the courts and before it reached legal proceedings, it has been absolutely clear that the two sides have completely failed to agree, and that greater polarisation has occurred as the debate has gone on. On the one side, consumer organisations and the public believe that these charges are totally unfair; on the other side, the banks suggest that this is normal practice to which they remain committed regardless of the public reaction. All that I can see arising from the voluntary mechanism is that we will get into a time-consuming discussion and end up, at best, with a fudge, and I suspect that neither side will be particularly happy with the outcome. The new clause offers a genuine prospect of delivering a quick and effective solution at a time when we have a window of opportunity. It would respond to the public mood and the expectation that change will follow the decision of the Supreme Court.
	In Committee, there was a lot of discussion about whether the wording of the new clause was appropriate. The Minister suggested, as he often does, and often correctly, that perhaps those who originated it had not thought through all its implications, and questioned whether there might be some unintended consequences. I was more surprised that he went on to complain that it was so widely drawn that it almost amounted to price regulation; I suspect that that might have been an overreaction. I accept, however, that he put forward a variety of reasons to justify his conclusion that the new clause should not be pursued. He talked in general terms about not intervening in competitive markets and about how competition benefits consumers. We had a long and fruitful discussion, led by the hon. Member for Chichester (Mr. Tyrie), about the idea that we should make financial markets more competitive. I sign up to that. However, much of our discussion of this issue relates to whether market failure is occurring and whether, in those circumstances, regulation is necessary.
	I want to return to the issue of unauthorised overdrafts. As we heard in Committee, one of the surprising things in a so-called competitive market is that the charges that the banks impose for unauthorised overdrafts are remarkably similar, so it is pointless for someone to go from one bank to another because they will be treated in pretty much the same way. Someone on a modest income will be charged a very large amount of money for their overdraft compared with what they have in the bank. It is difficult to see how the existing situation benefits consumers. I am therefore unmoved by the argument that competition will deal with the issue.
	The Minister suggested that the new clause would have a sweeping impact across the whole financial services sector. However, I remind the House that its terms would restrict the OFT to addressing only the ancillary terms of any contract-it would not have the right to question the so-called value-for-money equation or the price mechanism within those contracts. We must also recognise that the OFT would have to act only when the terms were unfair, and show clearly that in its view they were unfair, before action was taken. I accept that, as the Minister says, the new clause would widen the coverage considerably by taking in large numbers of financial services contracts. However, I submit-I understand that the Minister would want to consult others-that, with the restrictions that I have described, it would provide real protection for consumers in their financial services contracts.
	I listened very carefully to the discussion in Committee, and I was not entirely convinced that the new clause before us then would not have provided answers to the decision of the Supreme Court, the concern and anger of consumers and the public and the need for prompt and directed Government action. New clause 15 would do all those things, and I commend it to the Minister and the House.

Colin Breed: Again, we have had an useful exchange and I do not want to prolong matters unduly.
	I have some sympathy for new clause 9, but bank charges have been a bone of contention for far longer than the past couple of years or so. As a former bank manager many years ago, I can remember charging people two guineas-that shows how long ago it was-and sometimes five guineas. There was massive cross-subsidy-there always has been. Some poor soul would pay the five guineas, whereas the debt of someone who had worked their account enormously and had a large potential probate in the executor and trustee company was offset, and he would not be charged in case he took his business somewhere else.
	There has always been some mysticism about charges-much of it was done by holding a wet finger in the air. When computerisation was introduced, we had all the information about the accounts-the number of cheques, credits and so on-but at the end of the day, the system used to be based on how much we felt we could charge because we wanted to retain the business. I believe that there was far greater competition-genuine competition-then than there is today, and banks genuinely tried to secure new business.
	I therefore understand the sentiments behind new clause 9, and that back in those good old days-if they ever were good old days-bank accounts were not essential, but something that people wanted. Owning a bank account was not a requirement for living one's life, whereas it is today. People cannot really do anything without a bank account and it has become a much greater necessity for those who perhaps 20 or 30 years ago would not have contemplated having one. They did not need one-perhaps they could go to the post office or even a trustee savings banks or pay in cash. However, today, a bank account is necessary.
	My fear about the way in which the new clause is drafted is that, as a former banker, I could provide someone with such an account, but it would unfortunately not be accompanied by a cheque book; the holder would not be able to use a cheque card; there would be no arrangements for direct debits or standing orders; it would probably require a minimum credit balance of £100, but the holder would not have to do anything with it. It would yield minimum interest and, although the holder might not be charged for holding it, they might be charged for setting it up. The likelihood of anyone's holding one is therefore nil. We would have to be very detailed and prescriptive about the operation of such a bank account. It would therefore be almost a recipe for price regulation, which one would nail to the wall, and everyone would have to follow it. That would destroy the whole concept of competition.
	Yet I believe that there needs to be a basic bank account for people with low balances-those who have their wages paid in, and almost all the money goes out again during the month. They need a bank account, otherwise they cannot get paid. We need to find a way in which to implement if not a free account, a low cost account for those people.
	There has never been free banking-there is no such thing as a free lunch. However, since the Supreme Court decision, my fear is that the concept of people not being charged-which is not quite the same thing as free banking-will diminish and that many more charges will be levied on accounts.

Ian Pearson: I might put it slightly differently. I certainly understand the concerns of consumers who have been affected by the Supreme Court judgment-they do not feel that they have got the remedy to which they felt entitled-which is why the Government have announced that we will take action to work with the OFT, consumer groups and the banks to seek to agree a fairer, simpler and more transparent system of bank charges in future. We have not ruled out further measures if a voluntary approach does not produce results.
	We believe that a voluntary solution has many advantages. It can quickly adapt to changes in the market place. As my hon. Friend knows, any regulatory solution will need to be carefully thought through and will take more time. We must maintain price competition and avoid unintended consequences if firms compensate for any revenue reduction by developing new types of charges. However, there is a determination on the part of the Government that we should seek progress through the voluntary route.
	On the broader point about the regulation of contingent charges across all financial services sectors, as I have indicated, I do not think that the case has been made. It has always been the policy of successive Governments to rely on competition to make prices fair and to intervene only where there is a demonstrable market failure that cannot be fixed by other means.

Andrew Love: I had a credit union in my constituency, which got into trouble some years ago and, sadly, went into liquidation about a year ago. During the time of its difficulties, my constituents could refer to the ombudsman to take up any concerns that they had and when the credit union went into liquidation, there was a compensation scheme. Indeed, I was a small shareholder in that credit union and received prompt compensation. It is those features of regulation by the Financial Services Authority that it is critical for us to extend to members in Northern Ireland.
	As was mentioned earlier, the Treasury Committee, of which I am a member, visited Northern Ireland a week ago today. We were there primarily to look at the Presbyterian Mutual Society, but we touched on regulatory and other issues related to credit unions. The debate so far has summed up some of the ambiguities between registration and regulation. That is a feature in Northern Ireland where the local Department, DETI, is responsible for registration. In our discussions in Northern Ireland, people were at pains to point out that the law does not state as clearly as I suspect everyone would like the connection between registration and regulation. We were there to address those issues and our report will come out in the next few weeks.
	On credit unions, it is important that we recognise the wider issues involved. Of course, we have to solve the problem of registration and regulation. It has been answered in the context of Great Britain because it comes within the ambit, overall, of the FSA to carry out both functions. As someone who takes an interest in this, I have to say that the FSA has been effective at regulating the diverse credit union movement in England and Wales and has, indeed, been able to ensure that depositors are protected and that the problems that have arisen are taken up. Indeed, it has sponsored bringing credit unions together when that is a more acceptable solution to the difficulties that they might otherwise get into. There are major advantages to extending such regulation of credit unions to the Northern Ireland membership.
	It is particularly important, too, to remember that although credit union membership in Great Britain is very low-less than 1 per cent.-in Northern Ireland it is very significant indeed. There is a much longer history of credit union involvement in Northern Ireland and the number of members is significantly greater, yet they do not have as many protections as members in Great Britain. That needs to be remedied.
	As has been mentioned, the extension of the services that credit unions can provide into some of the more basic financial services-credit cards and various other things that have been mentioned-is critical if credit unions are to provide a 21st-century service and are to be allowed to compete with other financial service organisations. I think that I can be confident that, if that were to happen in Northern Ireland, they would be able to compete in a way that the credit union movement in Britain is not, as yet, ready to.
	For all those reasons-to ensure that the credit unions have those protections, that we clear up this confusion, that everybody is certain that regulation is extended to credit unions, and that we extend the services that they provide so that they can build on their membership and on providing a proper service to many disadvantaged communities across Northern Ireland-I commend the new clause to the House.

Ian Pearson: May I say, first of all, that it was a privilege to serve as a Minister in the Northern Ireland Office for some two and a half years? I thoroughly enjoyed the role, and I would like people to think that I performed it in an effective and diligent manner. I am sorry if I did not always agree with my hon. Friend the Member for Foyle (Mark Durkan), but I made the best decisions, as I saw them, for the people of Northern Ireland.
	My hon. Friend is right to point out the importance of the credit union movement in Northern Ireland. As he is aware, at the time of the Financial Services and Markets Act 2000, Northern Ireland credit unions opted out of the arrangements. That is why they have been exempt since 2001. I want to try to be as sympathetic and helpful to my hon. Friend as I can, but I think I need to make a few points to outline some of the difficulties with his new clause.
	The new clause is intended to revoke the exemption from FSA regulation that credit unions in Northern Ireland currently enjoy. On a purely technical level, the new clause would not work as intended since it revokes provisions that amended the original FSMA exemption order rather than revoking the exemption itself.
	Let me say two more things. First, the transfer of regulatory functions of Northern Ireland credit unions to the FSA is considerably more complex than the removal of paragraph 24A of the schedule to the exemption order. There would have to be changes to Northern Ireland legislation and because the rules on Northern Ireland credit unions are different to those that govern Great Britain credit unions there would also have to be some significant changes to the FSA's handbook, too.
	As my hon. Friend the Member for Foyle mentioned, issues surrounding the interaction between the registration regime, which he still wants DETI to perform, and regulation, which would be the responsibility of the FSA, would also need to be considered and resolved. He mentioned the work of the Assembly Committee and I would certainly like to pay tribute to him in his role as Chairman of that committee. It has produced a very good report. However, I am advised that the relevant Northern Ireland Department, DETI, sees no need for the proposed amendment or new clause because it intends to consult on changes to Northern Ireland credit union legislation later this year-very shortly, I understand. The policy objective of permitting Northern Ireland credit unions to offer additional services to match those available from credit unions in Great Britain will also require amendment to several pieces of legislation in Great Britain.
	I want to be sympathetic, and I appreciate the argument that says, "If you've got a bus coming along, why not jump on it? You don't know when the next one will be." However, my concern is that doing what the new clause proposes would be difficult. There has not been a statutory public consultation in Northern Ireland, even though it was always made very clear to me in my time there that such a consultation should be carried out for every significant issue. It is one thing to have an Assembly Committee-the equivalent of a Select Committee in the UK-with a consensual view on matters, but it is another thing entirely to hold a statutory public consultation before legislation is introduced.
	However, if the Government were to receive from the Northern Ireland Executive a request to move forward that was fully backed by the Assembly-and if the FSA agreed that that would be appropriate, and if the Northern Ireland Executive and Assembly tabled any legislative consent motion that might be required-we would want to look at it.
	There are a great many legislative intricacies when it comes to allowing the FSA to handle the proposed changes in Northern Ireland as well as in Great Britain. Despite the common agreement on the matter, my suspicion is that too much work probably remains to be done sorting out the nuts and bolts of those intricacies for the proposal to be included in this Bill, although something might be ready in time for a future Finance Bill.
	As I said, I will try to be as helpful as I can. I recognise that the credit union movement in Northern Ireland strongly wants to be regulated by the FSA, and I am sure that any public consultation in Northern Ireland would demonstrate that. If there is a way to do what the new clause proposes more speedily in this Bill, we will look at it. However, I suspect that the difficulties involved mean that the process might take a little longer than my hon. Friend the Member for Foyle would like.

Mark Hoban: This group of new clauses and amendments deals with the provisions set out in the first four clauses for the new council for financial stability.
	The Minister and I went round this loop a few times and at some length in Committee. I will not repeat the length, but I may repeat some of the arguments. The Bill puts on a statutory footing the standing committee of the tripartite authorities that sought to bring together the Bank of England, the FSA and the Treasury in a single body. Its remit was to be
	"the principal forum for agreeing policy and, where appropriate, coordinating or agreeing action between the three authorities. It is also an important channel for exchanging information on threats to UK financial stability."
	The body put in place as a consequence of the reforms the Government announced in 1997 has been subject to a lot of scrutiny over the past few years. Its operations were the subject of much work by the Treasury Committee, which said in its report:
	"We cannot accept... that the Tripartite system worked 'well' in this crisis."
	There is widespread agreement that the tripartite authorities did not work well together in the run-up to the crisis, and some fundamental reform is needed.
	There are two approaches one could adopt. The first is to say that the system needs to be swept away and there needs to be wholesale reform of financial regulation, and that the structural failures-between the Bank and the FSA, for example-are such that the Bank needs to take on additional responsibility as a macro-micro potential regulator. We need to reform what is left of the Financial Services Authority. That is the view we take on the Conservative Benches, but the Government take another view. Their belief is that the structure still works and all we need to do is to put the committee on a statutory basis. That is the thrust of the first four clauses.
	During the evidence sessions, the Minister said that
	"we could have done better."--[ Official Report, Financial Services Public Bill Committee, 8 December 2009; c. 10, Q16.]
	That is a mild understatement, typical of the Minister. In Committee, he made a much more vigorous defence of the merits of the standing committee and why it should be put on a statutory basis, instead of introducing the wholesale reform we proposed. His argument was that the committee worked well during the crisis. He cited four instances and said that no retail depositor had lost money. When it became apparent that the authorities did not have all the appropriate tools to resolve bank failure, the Government had passed new legislation-the Banking (Special Provisions) Act 2008, which the Minister and I dealt with in Committee.
	If the tripartite authorities had worked well before the crisis, those arrangements would have been in place, because it is clear from the war games between the Bank and the FSA, when they looked at what would happen in a crisis, that one of the missing tools was the appropriate resolution tool. The fact that the authorities felt the need to put in those tools after the crisis arose was not necessarily a sign of the success of the tripartite arrangements but rather recognition of their failure.
	The Minister said that the Government had used the powers to rescue failing banks and that the world's financial system stabilised as a consequence. However, although we can see what the outcomes of the tripartite committee have been, not much light has been cast on its inner workings since the crisis started.
	Some of the committee's failings are quite deep-seated. In Committee, my hon. Friend the Member for Chichester (Mr. Tyrie) asked the Minister how many times the committee had met before the crisis. The Minister tried to duck the issue; indeed, he succeeded, but we know the answer. The committee met only once and that was via a telephone call at the request of Hank Paulson, the then US Treasury Secretary.
	It is beyond belief that the body meant to co-ordinate risk and response did not actually get together. I do not understand why it did not, but the Bill rectifies that situation. It requires that the committee meet quarterly, but just in case the principals do not want to get together they can of course send their deputies instead. There is no guarantee that the committee will function properly if it is put on a statutory basis. It is a very Labour approach-"Something needs to be done so let's pass a law." There is a real challenge here.
	Given that the committee was the forum for discussing financial issues, and given the warnings published during the run-up to the financial crisis, we would have thought it had plenty to talk about. The Bank of England's financial stability report for 2004 said:
	"The questions are whether risk is being priced properly, and to what extent the search for yield is leading to excessive leverage"-
	a prescient warning of some of the problems emerging in the financial market, which would eventually lead to the crash, yet the committee did not meet to talk about those questions. I do not know what discussions there have been between the three parties, but clearly none of them got together in a room to talk about things. In the run-up to the crisis, the committee failed to look properly at the risks.
	The financial crisis demonstrated the problem of who was in charge. Who in the tripartite committee ensured that things were dealt with and that the authorities co-ordinated their work properly? We know that the authorities failed to co-ordinate over the emergency funding needed to provide a private sector purchaser for Northern Rock. Even when the committee was being established and the arrangements were being put in place, questions were being asked about what would happen in a crisis. In 1999, when the Financial Services and Markets Bill was wending its way through the House, my hon. Friend the Member for Chichester asked:
	"If a single bank crisis develops into a systemic crisis, who is responsible then?"-[ Official Report, Standing Committee A, 13 July 1999; c. 174.]
	When the Treasury Committee asked Governor of the Bank of England who was in charge, he came back with a question that may have been in part rhetorical:
	"What do you mean by 'in charge'?"
	That demonstrates some of the fundamental failures of the committee.
	We have a standing committee tainted by its failure to prevent or anticipate the crisis, and tainted by its failure to co-ordinate before or during the first stage of the crisis. In Committee, the Minister said:
	"I do not pretend that there was not room for improvement-indeed, lessons have been learned." --[ Official Report, Financial Services Public Bill Committee, 5 January 2010; c. 226.]
	That sounds encouraging, but if there are lessons to be learned we would expect far-reaching reforms to financial regulation. We would expect the committee to be restructured, to be more dynamic and forward-looking in its work and to be much more decisive and clear about who is in charge.
	We are not much further forward as a consequence of that process. The old memorandum of understanding for the standing committee said:
	"It is the principal forum for agreeing policy and, where appropriate, coordinating or agreeing action between the three authorities. It is also an important channel for exchanging information on threats to UK financial stability."
	The Bill says:
	"The Council must...keep under review matters affecting the stability of the UK financial system, and...co-ordinate any action taken...for the purpose of protecting or enhancing the stability of that system."
	All we seem to have done is to reshuffle the words, but the remit is exactly the same. That does not fool anybody. The Treasury Committee described the changes as "largely cosmetic". In a way, the Minister nodded to that argument when he said:
	"What we are doing through the Council for Financial Stability is formalising arrangements that have already been in existence." -[ Official Report, Financial Services Public Bill Committee, 8 December 2009; c. 5, Q4.]
	I am not entirely sure whether that was the warm endorsement of a new structure that we were looking for to give us confidence. We know that earlier this month the council has already met without legislative support. It has broadly the same remit, with a re-jigging of the wording. However perhaps it will be more decisive. Perhaps it will demonstrate the leadership we are looking for. The Treasury Committee report "Run on the Rock" said:
	"The Tripartite authorities did not seem to have a clear leadership structure. We recommend that the creation of such an authoritative structure, must be part of the reforms for handling future financial crisis."

Mark Hoban: The quotes that my hon. Friends and I have cited-there is a feast of quotes-demonstrate the fundamental failure of the architecture that the Government are putting in place through the Bill. Two of the three authorities that form the tripartite body demonstrate a lack of confidence in the arrangements, and the evidence from Mr. Coles shows that even those who are regulated by a part of the structure-the FSA in his case-lack confidence that the outcome will be any better than that under the standing committee. We need to address that problem, and new clauses 11 and 12 are an attempt to do that by drawing together the parties to the arrangement more closely.
	In new clause 11 we reflect on the fact that the Banking Act 2009 gave the Bank of England responsibility for financial stability, although the Governor argues that it was given responsibility without powers, which is addressed by new clause 12. It is clear that when the Bank of England undertakes its role of maintaining and enhancing financial stability, it should have some regard to the council for financial stability when devising its strategy, and that is what new clause 11 would achieve.
	Mr. Footman responded in the Public Bill Committee's evidence session to the Governor of the Bank of England's evidence to the Treasury Committee in which concern was expressed about the lack of powers to implement financial stability objectives. When I asked Mr. Footman what additional powers he thought the Bank needed, he identified the need for the Bank to have the power to collect information, saying:
	"Our slight discomfort with the Bill is because the process of collecting all the information is entirely with the FSA. With the best will in the world, operating through someone else to get something that you need is less efficient than trying to do it directly. For that reason, at various points we have asked for the Bank to have a direct power to get information from the financial institutions, consistent with the statutory powers that it has."
	He continued:
	"On the special resolution authority role, we do not have an information power, and we would like to have one directly." --[ Official Report, Financial Services Public Bill Committee, 8 December 2009; c. 48, Q138.]
	Under the Bill, the Bank is entitled to receive resolution plans as part of the living will procedures, but it will not have the power to request information from relevant institutions with regard to recovery and resolution plans. That is why new clause 12 would give the Bank of England, through amendment to the Banking Act 2009, new powers to request information, either in pursuit of its financial stability objective, or in relation to recovery and resolution plans. It would ensure that that linkage was there.
	I have already discussed amendment 3, which would delete clause 1. It signals our unhappiness with the arrangements that the Government have put in place.
	The Bill also sets out how we will be able to hold accountable the council for financial stability. One way to do that is publish the annual report, as set out in clause 3. There is a carve-out for commercially sensitive information-I understand the reason for that-and subsection (3) states:
	"The copy of the annual report laid before Parliament may omit... anything in the report relating to any action to be taken by any of the relevant authorities the purpose of which may be impeded or frustrated by being included in the report laid before Parliament".
	We recognise the risk that would emerge if sensitive information were disclosed to Parliament. That may undermine confidence in financial markets-we accept that-but my amendment 6 would ensure that, once the need for confidentiality had passed, that information was laid before Parliament.
	The proposal was prompted by the disclosure last November of the fact that emergency loans totalling £61.6 billion had been made to RBS and HBOS the preceding autumn, although that was not made known through the usual mechanism of informing the Chairmen of the Treasury and the Public Accounts Committees. It emerged as a consequence of evidence given by the Governor of the Bank of England to the Treasury Committee and the notes to the prospectus issued by Lloyds to support its rights issue.
	We need to strike a careful balance between confidentiality and ensuring that Parliament and taxpayers know how taxpayers' money has been spent-the Minister and I have had conversations about that at a number of points-but it is worth reiterating that taxpayers should know what is happening to the money that is being spent when it is appropriate for that to be known.
	Clause 5 gives the FSA a new objective-a financial stability objective. During the passage of the 2009 Act, we asked whether the FSA needed a financial stability objective comparable to that in relation to the Bank of England. The answer was, "No, it is already implicit in its responsibilities for market confidence." However, the Government have now decided that we must make explicit what is implicit.
	In determining that strategy, the FSA should ensure that it has regard to the work of the council for financial stability. It seems odd to give the FSA the duty to set up the new council on a statutory basis, but for there to be no linkage between the FSA's work on financial stability and the role of the council. That is the basis of my amendment 5.
	Again, if we are to persist with the Government's notion that there is equal responsibility among all members of the new council, one would have thought that the FSA-the "Authority" in clause 5-should consult not only with the Treasury, but with the Bank of England, given that it collects data on the macro economy, analyses some of the risks and publishes the outcome of the review of risks in the financial stability report. One would have thought it sensible to ensure that the FSA consulted with the Bank in that respect when determining its financial stability strategy.
	Amendment 8 would require the FSA to produce an annual report when discharging its duty under clause 8, which is entitled "Promotion of international regulation and supervision". The report would set out the range of measures agreed and dealt with at global level, as well as how they were being implemented in the UK, comparing implementation in the UK with that elsewhere in the world. It would also ensure that there was some discussion of the consequences of any divergence from the globally agreed measures and of how the FSA had chosen to implement them.
	That will be a growing issue for the financial services sector and for regulators in the future. A number of initiatives are being dealt with at global level now, where implementation is carried out at either European or national level. The part of the Bill that deals with remuneration contains a framework for the FSA to deliver rules that reflect the agreements reached at the G20, but from talking to people in the financial services sector I know about the concern over divergence in how those rules are being interpreted here in the UK and implemented elsewhere in the world. It is helpful to have clarity on how those divergences occur.
	However, that is not to say that we should act only where there is international agreement, and given the size of the UK's financial services sector relative to its economy, there may be areas where we want to take unilateral action to implement some of those global agreements in advance of consensus on how they will be implemented.
	We seem to be leading the way on living wills and the FSA is doing a lot of work to consider the impact of resolution and recovery plans on a sample of banks. The FSA's work may not only inform its implementation of those plans, but perhaps lead it to go ahead faster than the international consensus. That may be a reasonable thing to do.
	We have highlighted other issues concerning how to resolve the tension arising from integrated banks where retail and high-risk activities take place within the same entity. We argued in our White Paper that we have a significant concern about those matters, but that they could be resolved only at global level. The tax on the liabilities in banks that President Obama proposed last week is a measure that could be implemented only on a global level. If it was not, banks would simply opt to go to a low-tax or no-tax jurisdiction, rather than pay a high tax on their liabilities. That is another matter in which global consensus and agreement may be needed before a country would take action.
	It is important, particularly given the increasing concerns about the impact of those reforms on competitiveness, to ensure that there is a vehicle for flushing out some of those issues and ensuring that there is proper formal consideration as between what we are doing here in the UK and what is happening elsewhere in the world. My amendment 6 would provide a vehicle for that to happen.
	To conclude, in a way, we seek to be helpful by tying the arrangements more closely together. We also tried to be helpful in Committee, but the Minister did not seem to be very keen on our proposals.
	Fundamentally, a weakness exists that these reforms do not address. That is why we tabled amendment 3, which would simply strike out clause 1. We argue strongly that the Government's reforms are cosmetic, as the Treasury Committee said. They will leave in place the chaos and confusion over who is in charge, as shown by the evidence given in the oral evidence sessions at the start of consideration in Committee. The Government have simply failed to learn from the mistakes made in the run-up to the previous financial crisis. Unless we have significant reform, there will be a risk of those mistakes repeating themselves.

William Cash: I spoke on Second Reading, and nothing that I have seen makes any alteration to the view that I expressed in relation to the problem that I have raised continuously with the Chancellor of the Exchequer and the Prime Minister about the distinction between national supervision, which is just a figure of speech, and national control.
	I do not need to go into this in great detail because it can all be summarised very simply. We are losing national control over our financial services, which makes nonsense of Second Reading, Committee and Report. I am astonished that less attention is given to this than it merits. In the context of parliamentary sovereignty and the necessity for us to determine the manner in which we are governed, which in turn affects the manner in which the Financial Services Authority interacts with the Bank of England, and the completely pointless exercise of the council for financial stability, the whole architecture is overarched not only by the banking supervisory authorities that are being created by a series of legislative changes in the European Union using, I think, the ordinary legislative procedure but by the fact that we have effectively walked away from our responsibilities. I am absolutely astonished by the fact that we can go through these proceedings, in what is an almost empty House, without at least acknowledging that we are throwing away the ability to run our affairs and putting the City of London in great peril because of the duties that the Bill imposes.
	The clause on the council for financial stability says:
	"Among other things"-
	as if it is a kind of option-
	"the duty".
	Duty means "shall", which in turn means enforceable by a court, subject of course to the European Court of Justice, because these matters are being handed over to the supervisory authorities and everything that flows from de Larosière right the way through to the financial regulations that the European Scrutiny Committee insisted be debated. By the way, I am extremely glad that our Front Benchers actually opposed those regulations, thank God, because at least that gives us some future purchase on our ability to retrieve some of the mess that has been created.
	Exactly how all that will work out remains to be seen, but under the clause on financial stability, the duty requires the council to "co-ordinate". That is not the same as co-operate, because "co-ordinate" means a legal obligation to implement the laws, not, in the broad context in which it is normally understood, to co-operate. The council is required to
	"co-ordinate any action taken by the relevant authorities to promote international financial regulation and supervision".
	Great. Supervision, as I have said, is subsidiary to national control, but the critical words are,
	"the duty...to co-ordinate any action...to promote international financial regulation".
	Are we seriously mad? I may think that some members of the Government are, without mentioning them by name, but it is absolutely astonishing that we should allow that measure to go through on the pretext that, somehow or other, it will improve the stability of the UK financial system.
	It is invidious to go through the Bill for this purpose, but over and over again we find that we are faced with a requirement to accept a subsidiary role in financial regulation. My hon. Friend the Member for Fareham (Mr. Hoban), on the Front Bench, will understand me when I say that he and I have had a few words about that in the past, but I generally agree that we need proper fiscal responsibility, as I said in last week's debates over and over again. This Government are fiscally irresponsible, but the proposed institutional arrangements are to be subjected to the decision-making processes of the European Union and the European Court of Justice, as I said on Second Reading. It is therefore no answer to say, as the Chancellor tried to say to me on the Icelandic banks situation, "Oh well, it gives us some kind of leverage," when, in fact, we are to use the European Union to try to redress the balance if other countries want to do to us things that we do not like. Do we have no self-respect anymore? Do we not believe that we can run our own affairs?
	This is not just a cri de coeur; it is about the practical workings of the City of London, which are being put under intense pressure and threat and, indeed, put into abeyance. When the crunch comes and the legislation has made its way through the European Parliament, the milk-and-water, pathetic, third-rate, abject surrender to this process, which has been going on for several months and which I wrote about, if I may presume to say so, Madam Deputy Speaker, in the  Financial Times way back in February last year-

Ian Pearson: Conservative Members continually ask, "Who is in charge?" They do not have an answer. As I have said, we are clear that each authority has its own responsibilities.
	The FSA, as the independent financial regulator, is responsible for authorising and supervising financial firms and markets. It triggers the special resolution regime. The Bank of England, as an independent central bank, is responsible for providing liquidity assistance to the banking system. It has oversight of inter-bank payment systems and it is the resolution authority under the special resolution regime. The Treasury, as the UK's finance and economics Ministry, is responsible for the overall institutional structure of financial regulation and the legislation that governs it. It is ultimately accountable to Parliament and responsible for decisions that have an impact on the public finances.
	There is role clarity and there are different responsibilities, but we are all in it together. That is why the council for financial stability needs to sit down and go through the problems. The hon. Member for Stone should welcome that, and Opposition Front Benchers should recognise that it is in the United Kingdom's best long-term interests. I cannot find many people who are particularly sympathetic to the idea of creating the immense disruption that would ensue if the Conservative party's proposals to fold the FSA into the Bank of England were supported.
	Let me consider the amendments and new clauses. I think that the hon. Member for Fareham has tried to provide a focus for debate rather than help the Government -that is clear from amendment 3. Amendments 4 and 5 and new clause 11 relate to the way in which the authorities will work together to achieve their shared goal of financial stability. Amendment 4 would change matters to require the FSA to consult the Bank of England as well as the Treasury. In our view, it is unnecessary. The draft terms of reference for the council for financial stability already specifically require it to consider the financial stability strategies of the Bank of England and the FSA. New clause 11 is intended to have a similar effect to amendment 4, and the same arguments apply.
	On the Bank of England's financial stability strategy, it is required to prepare such a strategy under section 2A of the Bank of England Act 1998, as amended by the Banking Act 2009. The hon. Member for Fareham said that new clause 11 would make a difference, but we believe that it is defectively drafted. To have the effect that he seeks, it should refer to subsection (3) of section 2A of the 1998 Act. Regardless of its technical deficiencies, I make the same point as I did about amendment 4-it is simply unnecessary.
	Amendment 5 would require the FSA to have regard to proceedings for the council for financial stability when considering its financial stability objective. Again, it is unnecessary-I shall mention one or two amendments that I believe to be unhelpful, too. However, in the case of amendment 5, the FSA will clearly take account of the discussions in the council when considering how best to meet its objective of contributing to financial stability.
	I do not think there is anything to be gained by adding the "proceedings of the Council" to the list of matters to which the FSA must have regard in proposed new section 3A of the Financial Markets and Services Act 2000, which clause 5 would insert. Schedule 2(26) to the Bill already amends section 354 of the 2000 Act on the FSA's duty of co-operation, and we believe that that is more than sufficient.
	In new clause 12, the hon. Member for Fareham proposes new section 238A to the Banking Act 2009 to give the Bank of England the power to require any person with any information it believes necessary either in pursuit of its financial stability objective or to meet its responsibilities in respect of its recovery and resolution plans. Again, this is not a new issue-in fact, we debated the matter at some length in Committee and during the passage of the 2009 Act. The proposal is neither necessary nor desirable.
	For the record, if the Bank believes it needs access to information in connection with its responsibility for financial stability, it can ask the FSA to provide the required information. The FSA does not hold the information, but it would be able to collect it and provide it to the Bank. There is absolutely no need for the Bank to have its own direct powers to gather information from firms. As I think the hon. Gentleman is well aware, the protocol between the Bank and the FSA covers, among other things, how such flows of information will be managed between the two authorities. I welcome that as a good example of the Bank and the FSA working together on financial stability issues, which addresses some of the concerns that he quoted in his remarks.

Ian Pearson: I beg to move, That the Bill be now read the Third time.
	We have had an interesting debate on Report. I am grateful to everyone who took part in it, and to the members of all parties who have contributed to the debate as the Bill has passed through the House. In particular, I should like to thank those hon. Members who served on the Public Bill Committee, and I am grateful for the overall constructive approach that all sides adopted in those sittings, even when there was disagreement.
	In Committee, we had the opportunity to review and discuss in depth the Bill's specific measures. That process was instrumental in teasing out further details on how we envisage that the Bill's measures will operate. I know that that process was very much welcomed by a number of the outside bodies that follow our proceedings closely.
	I want to take this opportunity to remind the House of the context in which the Government are introducing this piece of legislation. Over the past couple of years, the global economy has been tested in ways that few would ever have anticipated.
	The origins of the crisis lie firmly in the financial sector. We have a duty, indeed an unprecedented opportunity, to review our financial landscape and ensure that the lessons of the crisis are learned by shareholders, corporate investors, management, regulators and Governments alike. We need to make absolutely sure that in future any crises will not only be less damaging but less likely altogether.
	The causes of the crisis were complex, and there is no single remedy for all of them at once. We need a package of measures that address the wide variety of aspects affecting the industry, from the way it is regulated and its corporate governance, to the way it treats its consumers. That is why the Bill contains such a diverse range of provisions. Together, the Government believe that those measures will help bring a real change in emphasis, in the way we consider and address systemic risk, and in the way we protect consumers.
	I am grateful to hon. Members for their probing and questioning over the past few weeks in Committee. I know there were some questions about the practical effects of some of the measures. I hope I was able to bring further clarity, and with it reassurance, to the Committee.
	Specifically, I know that the Committee had concerns about the proposed new powers of the FSA on remuneration rules. The Government were happy to remove any ambiguity, and following a recommendation from the Joint Committee on Human Rights, we tabled an amendment to make it clear that any FSA rules making contractual provisions void when they breach a prohibition on remuneration will apply only to contract provisions that are agreed after the rules in question have come into force. We are not proposing-as I think some were concerned-that the powers should be in any way retrospective.
	Similarly, I understand that there was some confusion about the scope of the short selling power. We had the opportunity to debate short selling today. I hope the confirmation that any prohibition would apply to identified financial instruments, or ban short selling in specified cases rather than by certain firms, will reassure hon. Members. It is not the case that one firm might be banned from short selling a stock when another was able to do so. I am happy to reaffirm that.
	Overall, I was encouraged by the willingness of the Opposition to support the principle of many of the Bill's provisions. Many of the questions relating to the recovery and resolution plans sought to ascertain what they might look like in practice, rather than challenge the intention of the plans, which is to reduce the impact and likelihood of firms failing. Only recently, we heard contributions to the "too big to fail" debate.
	I pay tribute to the hon. Member for Fareham (Mr. Hoban) for the thorough way in which he led for the Opposition. He was keen to find out what the court rules might look like in relation to collective proceedings. I sympathise with his desire to engage on the greater detail, although I hope the House appreciates that such a level of granularity is best determined by experts in the fields, and is a matter for other channels. Those aspects will, of course, be subject to consultation.
	We have discussed the shape of institutional arrangements at considerable length. I said a few moments ago that it was a well-trodden path-if not an excessively trampled one. It is an important issue, but as I have been at pains to stress on several occasions, I do not think structure is the issue. The crisis was a global one, affecting countries regardless of their institutional frameworks. What matters most is not who does the job, but that the job is done effectively, and that the institutional framework is clear and coherent. That is why the Bill focuses on making the existing arrangements work better by strengthening them further-for example, by introducing the council for financial stability, which will operate on a more formal, transparent and accountable basis than the previous arrangements, should the Bill pass into law.
	It is clear that the arrangements have not received universal approval, but the Government are clear that we need the authorities to focus on reducing risk and strengthening the resilience of the financial system, and-at the risk of repeating myself-not having to deal with the disruption and uncertainty that would be caused by unnecessary institutional upheaval. I think that we need to be very clear about the real risks that would be involved in that.
	Hand in hand with that, we propose to give the FSA a financial stability objective. While many have interpreted that as an erosion of the FSA's consumer protection objective, or vice versa, I believe that the objectives are in fact complementary. It is unlikely that one would succeed without the other-both are necessary.
	The Bill will enhance the powers and responsibilities of the FSA, embed a structure to monitor financial stability in the UK and abroad, and give regulators additional powers in relation to remuneration in the financial services sector. It was a shame that we did not have the opportunity to debate some amendments relating to those proposals today, but the measures were considered substantively in Committee. Importantly, the Bill will also ensure that banks and building societies address the likelihood and impact of their failure by drawing up contingency recovery and resolution plans.
	In parallel, the Bill includes provisions that will enable the creation of a brand new independent consumer financial education body to enhance education and awareness. It will establish new and more effective routes to redress and compensation for consumers where there has been widespread detriment. Again, although we were unable to discuss those issues on Report, we discussed the proposals extensively in Committee, and they have been widely welcomed by consumer groups.
	The proposals represent the Government's considered response to some of the key lessons learned during this crisis. The Bill entrenches a new strategy to ensure the protection of financial stability and wide-ranging reforms to the financial services industry. We want to ensure that the industry on which our economy relies so much emerges on a more robust footing. This vital Bill will help to build a new environment in which a financial services industry based on both stability and prosperity can thrive. That is no small task. I am most grateful for the thoughtful and thorough scrutiny that the House and the Public Bill Committee have given the Bill, and I commend it to the House.

Mark Hoban: I echo the Minister in commending all those who have participated in the scrutiny of the Bill, both on Report and in Committee. One of the strengths of the Public Bill Committee-I referred to this at the conclusion of its proceedings-was that it was assisted by the presence of several hon. Members from both sides of the House who were able to bring their expertise from serving on the Treasury Committee to bear on the matters in the Bill.
	Those Members were not the only people who contributed to the Public Bill Committee, however, and I am grateful to my hon. Friends who served on it for the time that they put into developing their ideas. The hon. Member for Wolverhampton, South-West (Rob Marris), of course, was a prodigious commentator on the Bill. I was sorry that the hon. Member for Twickenham (Dr. Cable) did not join us in the Public Bill Committee, even though he was a member, but his colleague, the hon. Member for South-East Cornwall (Mr. Breed), did a good job of setting out several of the arguments.
	It would be remiss if I did not say a few words about the Minister. This is our fifth Bill since October 2008, and among his hallmarks are his willingness to engage in debates and to give good answers to questions that are posed, and his understanding of the content of Bills, which goes beyond that occasionally displayed by Members on both sides of the House. I understand that he has decided to step down after the next election, whenever that comes, and I wish him well in whatever he chooses to do.
	The Bill is a strange combination. We did not oppose its Second Reading, and when I glanced just now at its contents, I realised how much of it we support. I would divide the measures into three categories: the welcome, the cosmetic and the misconceived. There are more measures in the welcome category than in the other two and important proposals will enhance consumer protection, but one challenge that the financial services sector faces as it seeks to rebuild confidence in it following the financial crisis of the past two or three years is how to encourage consumers to engage with the Bill.
	Many measures that focus on the consumer will help to encourage consumers to engage. Three distinct areas are involved in that, the first of which is the establishment of the consumer finance education body. One challenge that we all recognise is the need to increase people's confidence in discussing financial products with independent financial advisers, banks and insurance companies. A huge deficit in people's financial understanding needs to be dealt with.
	We will not necessarily all agree exactly about how that deficit should be repaired-the hon. Member for South Derbyshire (Mr. Todd) has his own views on how effective those measures will be and how best to target the work of the new consumer finance education body-but we are all clear that the work that the FSA has already established in the pilot projects needs to continue. On a visit to Gateshead, I saw for myself the importance of the work done by Age Concern and Help the Aged as part of the pilot project.
	The second group of measures aimed at improving the lot of consumers is the action taken on banning credit card cheques. Sending out unsolicited credit card cheques has been one of the most indefensible practices in the consumer credit industry over a long period. In Committee, I told hon. Members that my wife had received some credit card cheques before Christmas. The industry, knowing that such cheques were to be banned, was still sending them out. I had rather hoped that the pre-Christmas mailshot would be the last that she received including such cheques, but I was disappointed, as in the past 10 days or so they have been offered to her in another mailshot from her credit card company. Clearly, the consumer credit sector is having a last hurrah.
	The next batch of measures that protects consumers, which we welcome, is the arrangements on collective proceedings orders and consumer redress schemes. The point of contention, perhaps, between me and the Minister is straightforward: the measures have been included in the Bill, but they came as a surprise to the industry despite the fact that they were trailed in the consumer White Paper.
	The industry was not clear about how the measures would work in practice. The scrutiny process achieved some clarity on the fact that generic court rules would be designed, then Treasury regulations introduced to modify those rules to ensure that they were appropriate for financial services claims. That process is now understood and welcomed, but the industry will want to engage with it in some detail over the coming months, as the Minister might expect.
	Another important area, which we touched on occasionally in Committee, is what we do when a number of people have experience of buying a particular product involving a systemic case of mis-selling-for example, when a number of products with the same fault have been put on the market.
	Currently, such cases are dealt with by the Financial Ombudsman Service. I think that the procedure is unsatisfactory, both for FOS and the industry. The reforms set out in the Bill will insert a new section 404 in the Financial Services and Markets Act 2000 to create consumer redress schemes, which is an important move forward. I am sure that there is more we can do on safeguards to ensure that they work properly, especially where there is some doubt about the application of law or of FSA regulations. Improvements can be made to ensure that the proposals are welcomed not only by consumer groups, but by the industry.
	We also welcome measures on remuneration, the framework for short selling, which we debated earlier, and living wills. Our financial regulation White Paper, issued last year, outlined our support for living wills. That is an important part of the resolution regime introduced in the Banking Act 2009.
	There are cosmetic changes on financial stability and the Bank of England. When the hon. Member for Wallasey (Angela Eagle) was Exchequer Secretary, she was keen to point out that the FSA already had the implicit objective of financial stability. The Minister believes that by making that objective explicit it has greater salience, but we shall see what happens and how behaviour changes as a consequence. The duty to co-operate with international bodies was a matter of interest for my hon. Friend the Member for Stone (Mr. Cash). The FSA already does so much of that that it is difficult to see what more can be achieved.
	Some measures in the Bill are misconceived. The Minister referred to the well-trodden path in the first four clauses. We trod it well in Committee, both in our evidence sessions and in our debates. Indeed, the issues were reprised this evening, and they are the source of fundamental disagreement between the Minister and me. We set out clearly in our White Paper our plans to give increased powers to the Bank of England on micro and macro-prudential stability, and what we are going to do to give new powers to the Consumer Protection Agency. If I go on for too long, Mr. Speaker, you will rule me out of order for a Third Reading speech, so I shall save my remarks for another occasion, if the opportunity presents itself.
	There are important lessons to be learned from the financial crisis, and the Bill deals with some of them. However, the financial services sector must recognise that it is not just policy makers and legislators who need to make reforms, but that it, too, must engage. I am sure that we will return to these issues again, because as the financial crisis unfolds-the Bill is good at future-proofing, with measures on living wills, for example, on which we are creating a framework for the FSA, and measures on remuneration, which create another framework for it-there will be opportunities to identify new issues, which may require legislation, as a result of the duty to co-operate with international financial institutions.
	This is a helpful Bill that improves the opportunities for consumer protection and education. It makes important changes to the framework to help to ensure that if there is another banking crisis a proper resolution is in place. There are things in it that we support; there are some things that we think are purely cosmetic; and there are some things that are misconceived. However, the process that it has undergone over the past couple of months has helped to illuminate its workings and set out the challenges to which we all need to rise.

Charles Walker: I, too, enjoyed serving on the Committee that considered the Bill, and shall say some nice words about the Minister. He has worked incredibly hard over the past two years-some people have worked him too hard. He has announced that he is leaving the House at the next election. I know that he has a great many friends on both sides of the Chamber, and I am sure he will find a berth very quickly in the private sector, where his talents will be put to good and, I hope, profitable use. So I say farewell to the Minister, at least from the perspective of seeing him at the Government Dispatch Box.
	A witness who appeared before our Committee said that the banks made entirely the right decisions based on the totally wrong assumptions. If the Bill starts to redress that imbalance in decision making, it will be a good thing. I am not entirely sure that I believe that the council for financial stability will be a wild success. I remain to be convinced about that, because ultimately, if we want banks to be responsible, we need responsible management and responsible shareholders who want long-term returns on their investment, not short-term returns.
	Perhaps I may add, without trying Mr. Speaker's patience, that we need fewer people called Fred the Shred running our banks. We need more people called Brian the Boring running our banks-good, old-fashioned, boring bankers who can make the numbers add up at the end of the month. That is what the British public want-a lot of boring bankers. I said that very slowly.
	Consumer financial education sounds very boring, but my word, it is important. If something sounds too good to be true, it is too good to be true. Many banks have taken advantage of people who lack financial sophistication, and that is not to the banks' credit. One of the reasons we are in this mess is that many people have over-extended themselves, not because they are greedy but because they have been persuaded by their banks that they can afford to take that debt on board. Educating the customers of banks and financial institutions is crucial. We do not want to do that only when they walk through the doors of those establishments as adults. We need to start educating them at school at an early age. For that reason, if for no other, I am entirely happy to support the Bill. I am sure it is just one building block of a very large house that we will all need to build.

Charles Walker: I want to be charitable this evening, because I believe that there will be a change of Government in three to four months, and that is a good thing. The democratic wheel turns and other people get their turn in Parliament; and then in 10 years' time we will all be hated and I imagine that the other lot will get their turn. In agreeing with my hon. Friend, however, I do think it very important that children in Southend and Broxbourne, from a very early age, understand the importance of finances, and understand that how they manage their finances will have a major impact on their life. With that, I shall sit down and allow others to take part.

John Pugh: I think that it could fairly be said that postmen live unique but important lives. They work some pretty unsocial hours, yet they need to have the social skills to interact with every kind of person they meet. They call at every house and every business, so they have an unrivalled view of how our communities and towns are made up. They are a tolerant lot, putting up with letterboxes in ridiculous places, dogs of all dispositions, and gates and paths that offer more in the way of hazard than access. Not surprisingly, usually there is a real camaraderie among postmen, which is encapsulated quite well in the recent Ken Loach film, "Looking for Eric"-"Eric" being Eric Cantona-which even I, as a Liverpool supporter, managed to enjoy and which I would recommend to you, Mr. Speaker, if you have a spare moment. The British postman is part of the life of all of us. He brings us the bills, the good news, the presents, the offers, the bad tidings; and most importantly, of course, the constituency mailbag. It is easy to romanticise Royal Mail.
	Given all that, and given such a perspective, what I have to do tonight is to explain why, in the relatively small Royal Office in Southport, 46 postmen have been suspended or dismissed or have gone off work with stress; why I receive e-mails and letters from their wives, alarmed by the prospect of dismissal, loss of income, mortgage arrears and repossession; and why apparently experienced and loyal staff get dismissed and good postmen fear for their jobs. I have tried to answer those questions outside this place in the ordinary way of casework. I have inquired about specific cases, but Royal Mail will not talk about specific cases. I have tried to get comparative statistics, but Royal Mail will not provide them. I have tried, in desperation, writing to the chief executive, Mr. Crozier, but his underling replied with warm words that did not assist me with my questions. So here I am on this Monday night, not because I am against Royal Mail privatisation, although I am, and not because I think that the union states a good case in that respect, which I do, but simply because I know people who are losing good jobs and I understand what they, their wives and their families feel.
	Let me explain. In my constituency, Royal Mail is summarily dismissing or suspending people for things such as not wearing their cycle helmets; for leaving letters in post boxes, even if they have never done it before; and for leaving mail, in exceptional-and I mean exceptional-circumstances, unguarded. All this is picked up and identified by a management intent on surveillance and on forcible action. It does not matter that the individual has an excellent employee record or that affairs are conducted differently elsewhere. I gawped with wonder when I recently saw in another town postmen without helmets cycling happily away from the local HQ, in full view of everyone. I will not mention the town for fear that at some later date those postmen, too, will get into trouble. No matter that management reserve the right to breach the rules on occasions themselves-that does not seem to have any impact. They sometimes do not sign for registered mail, especially if it is a letter from an employee about their disciplinary hearing.
	It would be quite easy to leap to the conclusion that there is an underlying strategy to find reasons to shed experienced staff, so as to cut costs, replace permanent staff with casual or reduce pension liabilities. How else can we explain the fact that the manager who has sacked the most staff appears to be the most applauded by the Royal Mail? I do not go for easy explanations, but I am not entirely certain what other explanations I should offer in this case.

Patrick McFadden: If issues arise from the policy, they have to be dealt with by Royal Mail under its disciplinary procedures. If employees still have a grievance, they have recourse to the tribunal. I am saying that the issue has been debated for some time within Royal Mail, and there is a clear policy on it.
	The hon. Gentleman has raises the issue of consistency between areas. Royal Mail is a large organisation, and it is not inconceivable that there are inconsistencies. I suspect that not everything in Royal Mail is done in exactly the same way in every delivery office or sorting office.
	Before the debate, I asked my officials to contact Royal Mail to see whether there are particular issues in the hon. Gentleman's local office. Royal Mail told my officials that that delivery office is one of the largest users of cycles in the UK and that failure to wear cycle helmets has been an issue in the past in the area. Locally, the issue was debated at an area forum in 2008 and a new approach was adopted, under which non-wearing of cycle helmets was deemed a serious breach of instructions. Royal Mail has told my officials that employees were briefed about that and the consequences of the failure to comply.
	I understand that it is open to hon. Members to raise any issue with me in these debates, but the broader point is that under the reforms put in place in the Postal Services Act 2000, we gave Royal Mail greater commercial freedom and established a clear distinction between ownership of the company and the day-to-day running of the company. Since then, we have not tried to second-guess management every step of the way or on everything that happens inside local offices. The company's board and its managers are there to run the company. The management and unions must work together to ensure that the proper procedures are in place. As I have said, the CWU, the main union in the Royal Mail, has been involved in the preparation of such policies, including on cycle helmets.
	More broadly, and to return to the current negotiations, I agree with the hon. Gentleman that there has been a pattern of local disputes in Royal Mail, whether in his local office or other local offices. It has held the organisation back, resulted in other disputes whereby custom is lost to other mail operators and affected morale in the organisation. It is in everyone's interests for the current talks to reach not an agreement that unravels in its implantation, but a long-term agreement that secures shared ownership of Royal Mail's long-term goals, because as I have said-sometimes perhaps without any great acceptance in the House-the technological challenge is not going away. The capacity to communicate by means other than mail will only increase, which means that the pressure for change will increase. What I hope will emerge from the negotiations is a long-term agreement whereby we can get away from that pattern of disputes and from the mistrust, to which the hon. Gentleman has referred, in the Hooper report-we all acknowledge that it is there-and get industrial relations on to a better long-term footing for the future.